Mr. Kalinowski: Well, there's definitely a series of criteria that we look at when we're deciding which stocks to recommend within the restaurant industry. A powerful brand, for instance, would be very important. Essentially, you're going to a restaurant not just for the food but for the overall experience. We also believe that sustainable methods of retaining quality employees are very important.
TWST: That's been very difficult, hasn't it, over the last year or two?
Mr. Kalinowski: Yes. The restaurant industry definitely struggles with
turnover, more so than most other industries, and with the unemployment
situation as it is, with the rate being around 4%, it's been very
difficult to find people to staff restaurants. So the more that can be
done to keep talented people on staff, the better off the business tends
to be. Other things that we like include an ability to thrive in
international markets ' and companies such as McDonald's (MCD) and
Starbucks (SBUX) seem to have done much better on that front than
others; a great amount of focus on operational excellence; an
environment in which unit growth is not excessive, because no matter how
well a chain restaurant is being run, a condition of oversupply in the
industry will hurt; and finally, a visionary management team is also
very important.
Tickers included in this excerpt: DRI, EAT, MCD, SBUX, WEN, YUM
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